Green Transformation & Sustaninability
Green Transformation & Sustaninability
Green Transformation & Sustaninability
Sustainability
TABLE OF CONTENT
INTROUCTION
CONCLUSION
LIST OF REFRENCES
LIST OF TABLES
Many companies have a vision of what they would like to achieve, and it is often a vision of what the
company should be in the future, rather than the contribution it can make towards a more sustainable
and better world. (Ørsted, 2019). This distinction is critical. For companies to be truly aspirational,
they need to make a more significant contribution and have a larger idea. It is not about that particular
company, but what the company can do to contribute to a more sustainable future.
The Research question for this essay is - What is the role of firm resources and capabilities in firms’
green transformation and sustainable practices? The preceding paragraphs have set the stage for a
thorough examination of the question at hand. To achieve this goal, the essay will be divided into
several sections. The first section will provide an in-depth understanding of sustainability, its
practices, and what green transformation entails. This will be followed by an exploration of the
evolution of the green perspective of nature with sustainable practices. The third section will delve
into the existing resources and capabilities of firms in general and how they can modify these to
transform themselves into green firms. Finally, the essay will showcase an exemplary case of the
extraordinary efforts made by a multinational firm to achieve green transformation. Together, these
sections will offer valuable insights into the steps that companies can take to adopt more sustainable
practices, contributing to the long-term health and vitality of our planet.
Sustainability is defined as: “the integration of environmental health, social equity and economic
vitality in order to create thriving, healthy, diverse and resilient communities for this generation and
generations to come. The practice of sustainability recognizes how these issues are interconnected
and requires a systems approach and an acknowledgement of complexity.” (UCLA sustainability,
n.d.). Sustainability is the practice of maintaining ecological, human, and economic health and
vitality. It recognizes that resources are finite and should be used judiciously, with a focus on long-
term priorities and consequences. Essentially, sustainability concerns the future generations, and
the legacy that we want to leave for them.
As we navigate through the challenges of the 21st century, it is essential that we prioritize
sustainability in every aspect of our lives. This is especially true for businesses that operate for
commercial gain, as their actions can have a significant impact on the environment and future
generations. The shift towards sustainable practices has become increasingly important as we
recognize the finite nature of our resources, and the need to use them conservatively and wisely. By
adopting sustainable practices, businesses can not only reduce their negative impact on the
environment but also improve their economic health and vitality in the long run. It is crucial for
businesses to take responsibility and play their part in creating a more sustainable world for our
children and grandchildren.
The term 'green' refers to environmentally friendly or nature-centric practices, which serve as a guide
for the overall concept. The word 'transformation' denotes the need for structural and strategic
changes, which are essential for achieving a more sustainable future. Through green transformation,
we can implement sustainable practices and technologies, reduce our ecological footprint, and
create an eco-friendlier environment. This involves the adoption of innovative solutions that prioritize
environmental sustainability and promote social responsibility. By prioritizing green transformation,
we can mitigate the negative impact of human activities on the environment and achieve a more
harmonious relationship with nature.
The era of green transformation has revolutionized the way businesses operate, enabling them to
grow sustainably while preserving natural resources, business models, and cultural values (2030
Builders, n.d.). As globalization continues to reshape the business landscape, the urgency for
complete transformation of business activities towards sustainable and environmentally friendly
practices is louder than ever. Climate change, caused by increasing greenhouse gas emissions,
demands immediate action to prevent further deterioration of the environment. This pressing need
calls for firms to embrace green initiatives and transition their businesses towards a low-carbon
economy. It is pertinent to conduct a comprehensive analysis of this concept to gain a better
understanding.
Green innovation has long been recognized as essential for organizations and society as a whole.
Despite this, the negative consequences of environmental degradation and resource depletion
resulting from population and technological growth have often been overshadowed by economic
interests. However, the need for sustainable operations and practices is not a new concept, as it can
be traced back to before the 18th century and during the onset of industrialization.
According to Rockström et al. (2009), there are nine planetary boundaries that are at risk of being
breached due to human activity. These boundaries include climate change, ocean acidification,
stratospheric ozone depletion, global phosphorus and nitrogen cycles, biodiversity loss, global
freshwater scarcity, land-system change, atmospheric aerosol loading, and chemical pollution. Over
time, there have been several pivotal moments that have had a significant impact on our
environment, ultimately leading to the need for this essay to be written. These events have altered
our natural world to an unprecedented extent, and their effects have continued to accumulate over
time, creating the urgent need for action.
The dawn of the Industrial Revolution in the mid-18th century marked a pivotal moment in the course
of history. With the rise of capitalism and unprecedented productivity, a new mechanical and
innovative world emerged. However, the use of vast quantities of raw materials sourced from
England's colonies, such as India and other South Asian nations, marked the beginning of the
exploitation of natural resources.
It's important to note that even before the Industrial Age, sustainable practices were already in place
in mechanical fields of production. Nevertheless, the surge in resource consumption during the
Industrial Revolution ushered in new challenges, including environmental degradation. In response
to these challenges, people turned to renewable sources of energy. Even back then, they recognized
the potential danger of overutilizing natural resources and were concerned about the impact on future
generations. As such, there was a growing interest in adopting sustainable practices to ensure a
more sustainable future.
The capitalized industrial age in the world contributed to production and technological development,
which increased the consumption of vast quantities of energy to run operations and manufacturing
industries (Newell, 2015). Before industrialization, previous modes of production were primarily used
to operate within the solar-income constraint. The solar-income constraint involved the use of
immediate energy processed by the solar panels from solar energy into electricity. This solar
constraint was used for various purposes of manufacturing production. Capitalist production broke
the solar-income budget constraint, which resulted in throwing the society out of ecological
equilibrium.
In the 20th century, Fordism emerged as a crucial period when the Ford Motor Company introduced
a mass production system. (Jessop, 2020). This era also marked the advent of advanced capitalism,
and Ford played a pivotal role in shaping the post-war model of economic growth and its
corresponding social and political structure.
The focus on production during the industrial age cannot be divorced from the changes that occurred
in consumption patterns. (Newell, 2015). However, it is notable that consumption transformations
were aimed at increasing the consumption of resources and material products, as seen in the Fordist
era. The need for new systems of transportation and a reorganization of the production process also
led to a requirement for mass consumption of the goods being produced in the factories of mid-
twentieth-century America.
This mass consumption was ultimately dependent on the provision of cheap energy to power
privatized automobile transport and electrified/heated single-family homes. (Huber, 2008). It is
evident that the specific underpinnings of the Fordist model involved the twinning of economic
expansion based on mass production with the creation of a consumer base to absorb the fruits of
this up-scaling of production. As a result, this model led to the depletion of natural resources, the
degradation of the environment, and other negative consequences that were overlooked in the
pursuit of economic growth.
Throughout history, two major conflicts have been recorded - World War I which lasted from 1914 to
1918 and World War II which occurred from 1939 to 1945. These wars were significant not only
because of the participation of major countries but also due to the extensive devastation they caused.
The harmful impact of these wars was witnessed in terms of loss of human lives, destruction of
livelihoods, and severe damage to the environment. Nuclear explosions, toxic fumes, and depletion
of vast quantities of resources inflicted long-term damage on nature, which raised serious concerns
about its future health. Although these events took place many years ago, their negative impact on
the environment has culminated in the current issue of climate change. Therefore, it can be said that
the consequences of World War I and II had a profound impact on the environment and nature's
resources.
In today's globalized world, people work in various ways to sustain themselves financially, and large
businesses help facilitate this process. It can be argued that the economy is a critical aspect of our
society, with profit maximization being at its core. Companies invest significant resources and efforts
into maximizing their revenue, often at the expense of the environment. However, with increased
awareness and knowledge spreading through globalization and media, businesses of all sizes are
attempting to reduce their impact on the environment. It is important to understand the measures
these businesses are implementing to modify their capabilities and resources while also gaining
insight into their existing resources and capabilities.
A company’s resources and capabilities are its building blocks. It represents the organizational
construct of any firms. Its resources represent its power and strength. A Firm’s resources include all
its tangible and intangible units that together as a whole helps in meeting its objectives and attain
success. The resources and capabilities of a firm play a crucial role in its success and
competitiveness.
Tangible resources - It refer to the physical and financial assets of the firm, such as its warehouses,
machines, land, and offices. These resources provide the structural and financial foundation of the
organization, giving it legitimacy in the market.
Intangible resources - These are the non-physical assets of the company, including its patents,
knowledge and skills of employees, reputation, unique information and brand name. These
resources are crucial in making the organization visible and recognizable in the market, leaving a
mark on consumers through its services and brand loyalty.
The proficiency of an organization in skilfully deploying and leveraging its assets is the defining factor
of its capabilities. Making effective use of the resources is its capability. (Nijssen & Frambach, 2001).
These abilities serve as the catalyst for its competitive edge, setting it apart from other brands or
entities. An organization's resources and capabilities act as the impetus for unlocking strategic
opportunities in the market. The Resource-Based View of the firm posits that distinctiveness in an
organization's resources and capabilities plays a significant role in determining its competitive
advantage.
Capabilities refer to the unique set of skills, knowledge, and resources that a firm possesses,
enabling it to carry out various activities effectively. (Saylor Academy, n.d.). These abilities can
include providing exceptional customer service, delivering innovative products, and offering efficient
after-sales support, among others. By utilizing its resources and leveraging its capabilities, a firm
can create products and services that outperform those of its competitors, giving it a competitive
edge in the marketplace. For instance, a firm may offer its customers a product with superior quality,
innovative features, or lower prices compared to similar products in the market. However, not all
resources and capabilities are equally beneficial in creating business success. Therefore, an internal
analysis is necessary to identify the specific assets that provide the most value to the firm. Such an
analysis can help a firm to allocate its resources efficiently, focus on its strengths, and eliminate or
minimize weaknesses. By doing so, the firm can develop and maintain a sustainable competitive
advantage over time.
Overall, resources are important for firms to achieve their strategic goals and succeed in the green
transformation process by promoting sustainability and eco-friendliness. On the other hand,
capabilities make correct use of its resources to provide desired results. Firms are capable of
changing their implementation and operational structure to provide environmentally friendly goods
and services. An organization’s existence is the mercy of its resources and capacities that gives it
a competitive edge in the market. This advantage can take a turn and evolve itself gradually by just
adding some values with revenue. Further in this paper we’ll discuss in detail how resources and
capabilities of a firm can contribute to the environment by transforming itself green.
In order to achieve a strategic fit with the growing climate needs, organizations must leverage their
existing resources and capabilities to adapt to their changing environment. This requires a proactive
approach towards green transformation, which is vital for ensuring the sustainable future growth of
businesses. By utilizing their resources and capabilities to implement environmentally friendly
practices, companies can not only meet the demands of the market but also contribute towards
building a better world.
Firms can modify or make some vital changes in the way they work. This can be done by altering
the functions and quality of the resources being used. Firms are capable of transforming the whole
economy. With the growing awareness and need to reform the way an industry works like – reducing
its carbon emission contents, building of renewable energy plants where high level of energy is
needed, reducing the extraction of poisonous gases, less pollution, no discharging chemical waste
into water, etc. There is a growing need for ecological friendliness in almost all the products and
services consumers or businesses use. This is not a condition for doom for a company but rather
this can turn the whole fortune of its growth and success, if they strategically plan everything
efficiently. They can use this as the opportunity to enhance and strengthen their competitive
advantage in the market. Firms can use the opportunity of green transformation and convert it as a
resource for themselves and build new, innovative, revolutionary and sustainable capabilities around
them.
As highlighted by Kolk and Pinkse (2016), businesses have begun to think beyond their immediate
interests. They recognize the significance of conducting their operations sustainably, preserving
resources for future generations. This shift in perspective is driven by an increasing awareness that
the current economic progress compromises the availability of resources for the next generation. As
a result, businesses are compelled to think beyond mere profit maximization. To achieve this, firms
need to modify their strategic composition or organizational structure. Adapting to the needs of the
environment and stakeholders requires a comprehensive and integrated approach, one that
considers not only the economic but also the social and environmental dimensions of their actions.
To address the growing public demand for sustainable business practices, many large multinational
enterprises such as Coca-Cola, Kellogg's, and DuPont have started to incorporate chief
sustainability officers into their organizational structures. (Kolk & Pinkse, 2016). These officers play
a key role in designing sustainable development strategies that not only generate revenue but also
align with environmental concerns. Through their efforts, these companies have recognized the need
to prioritize sustainability in their operations and are taking steps to integrate it into their overall
business model. This is a clear reflection of the shifting attitudes towards environmental responsibility
and the growing recognition of the importance of sustainable development in the modern business
landscape. Big corporations now employ accounting frameworks to monitor and assess the
effectiveness of their sustainability strategies. Such frameworks assess the firm's performance in
terms of economic, environmental, and social factors. These evaluations are conducted regularly to
ensure that the firm remains committed to its sustainability goals and its strategies are effective in
achieving those goals.
The pursuit of sustainable development by a firm is contingent upon the strategic management of
resources, including specialized routines, dynamic capabilities, and organizational assets. (Kolk &
Pinkse, 2016). The global community's increasing emphasis on the United Nations' Sustainable
Development Goals (SDGs) has influenced numerous multinational enterprises to implement
proactive measures that encourage green innovations, which facilitate sustainable development.
The design of green innovations aims to create products that consume less energy and raw materials
during manufacturing, reduce adverse environmental effects during use, and can be easily recycled
post-use. Considering green innovation as a strategic resource for a firm may address a variety of
social and environmental challenges associated with sustainable business practices.
In order to gain a deeper understanding of this concept, it is essential to conduct a comprehensive
analysis and explore the practices that firms undertake to modify their resources and capabilities,
ultimately transforming their operations towards greener and more sustainable practices.
To obtain a more profound comprehension the notion of green transformation and sustainable
practises, it is crucial to conduct a thorough examination and stating of some practises that firms do
with modifying their resources and hence their capabilities to turning their operations into greener
and more sustainable.
A firm's supply chain and transportation systems can be optimized to enhance their eco-
friendliness and economic viability. Sustainable development can be achieved by modifying
the logistics operations to minimize the drastic environmental impact of the firm's operations.
Incorporating green products into a firm's strategy of product stewardship can yield positive
results for both the environment and consumers. (Khanra et al., 2022). By designing and
structuring products with environmental factors in mind, firms can reduce waste and minimize
energy and resource consumption during the production phase. This approach can mitigate
adverse environmental impacts, including air and water pollution, and reduce waste
generation throughout the product lifecycle. Furthermore, consumers are likely to appreciate
and support the use of green products, as they promote a sense of responsibility towards the
environment.
Tesla's electric cars stand out as a prime illustration of green products that have captured
the hearts of eco-conscious individuals, while also becoming a coveted status symbol in
modern times. By introducing ground-breaking technology, Tesla has not only contributed to
environmental sustainability but has also established itself as a leader in the automotive
industry worldwide, gaining a competitive edge.
Source: Adapted from Baumgartner, R. J., & Ebner D. (2010). Corporate sustainability
strategies: Sustainability profiles and maturity levels. Sustainable Development, p. 79.
Ørsted's green transformation includes their efforts towards building offshore wind farms and
reducing carbon emissions. (Ørsted, 2019). They have shifted their business model to prioritize
renewable energy, with a goal to be carbon neutral by 2025. Ørsted is also committed to making a
positive impact on the environment and has been recognized as the world's most sustainable
company by Corporate Knights.
Despite facing several challenges, the company persevered through their journey of transformation
towards sustainability. (Ørsted, 2019). They worked tirelessly to reduce offshore project costs, but
the path was filled with obstacles. However, the company had a long-term vision in mind that went
beyond just achieving their profitability goals. They aimed to make a significant contribution to the
environment and society.
Through their green transformation, the company not only benefitted the environment but also their
employees. (Ørsted, 2019) The employees were proud to be a part of a company that was leading
the way in the renewable energy sector. Working for a company that prioritized sustainability had a
positive impact on their motivation and job satisfaction. They felt a sense of purpose and were
passionate about contributing towards a better future.
The company's journey towards sustainability was a challenging but rewarding experience. (Ørsted,
2019). It was a testament to their commitment towards making a positive impact on the environment
and society. Their efforts not only resulted in a cleaner environment but also a more motivated and
satisfied workforce. Ørsted's green transformation serves as a valuable example for other
businesses looking to prioritize sustainability and reduce their impact on the environment. By
committing to renewable energy and making changes to their business model, companies can make
a significant impact on the fight against climate change. Additionally, prioritizing sustainability can
have positive effects on employee morale and motivation, leading to a more engaged and productive
workforce. When Ørsted started their green transformation, 7% of their profits came from
renewables. Today it is estimated to be close to 100%. So their transformation is now successful.
CONCLUSION
This essay delved into the concept of green transformation and the importance of sustainable
practices for firms and businesses. It highlighted the pivotal role that resources and capabilities play
in their economic and social success, and how firms can modify them to effectively implement
sustainable practices in their product formation, selling, and overall marketing mix. The essay also
discussed the challenges that firms face in transforming their practices and operations to become
green, and the responsibilities that come with their position in the world. The inspiring green
transformation journey of Ørsted, a European energy production firm, serves as a valuable example
for other firms looking to shift towards sustainable practices. Overall, this essay emphasizes the
need for collective action and a shared commitment to building a sustainable future for all.
The world is currently facing environmental challenges that require practical and action-oriented
solutions, rather than just rhetoric from global conferences like the G-20. To ensure a sustainable
future, it is crucial to prioritize the adoption of green practices and technologies, which are essential
for reducing our ecological footprint and preserving the planet for future generations. Green
transformation offers an effective approach to achieving sustainability goals, such as prioritizing the
use of renewable resources, reducing carbon footprint, and adopting innovative technologies.
The growing emphasis on sustainable practices and green transformation reflects the severe
environmental challenges facing modern society, including climate change and depletion of natural
resources. Industries are transitioning to renewable energy sources and environmentally friendly
technologies to reduce their ecological footprint. It is crucial to recognize the importance of green
transformation and adopt sustainable practices to mitigate the impact of capitalist production on the
environment, through collaborative efforts and a shared commitment to building a sustainable future.
Effective government policies are needed to promote green companies, product design, and
manufacturing. Researchers suggest that the economic slowdown caused by the COVID-19
pandemic may provide policymakers with opportunities to implement proactive solutions for
sustainable development. Over the past two years, the world has faced an unprecedented crisis in
the form of the COVID-19 pandemic. However, despite the difficulties, this period has also brought
about positive changes, particularly in the realm of environmental research. The pandemic has
highlighted the need for sustainable practices, as well as the potential for green transformation of
firms on a global scale.
Researchers around the world have been actively studying the impact of the pandemic on the
environment and the economy and have identified opportunities for the adoption of sustainable
practices. As a result, the pandemic has provided a unique opportunity to advance the global green
agenda and accelerate the transformation of businesses towards sustainable models. Future
research could provide useful inputs to promote innovations in green product design, ultimately
leading to an eco-friendlier future. Achieving this requires collective effort from individuals,
organizations, and governments to work towards a common objective of sustainability.
To pave the way for a sustainable future, it is imperative that we build on the successes of past
sustainable practices and leverage the potential of present and future technologies. With collective
effort from businesses and governments across the globe, we can drive a green expedition that
transforms our world for the better. By collaborating on the development and adoption of sustainable
technologies, we can accelerate the transition to a greener economy and mitigate the impact of our
actions on the environment. It is only through shared commitment and cooperation that we can make
this journey smoother and more effective, ultimately creating a brighter and more sustainable future
for generations to come.
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